EasyJet posts windfall profits but warns traffic control strikes in France could throw it off track
Easyjet posted windfall profits when the British went on holiday, but warned that upcoming strikes could hurt its performance.
The low-cost carrier revealed record profits of £203m for the three months to the end of June, up from a loss of £114m a year earlier. It flew 23.5 million passengers, compared to 22 million in the same period of 2022.
The Luton-based airline said it expected to generate “another record” in the current quarter ending in September despite canceling 1,700 flights last week as it tries to weather traffic control strikes in France.
Johan Lundgren, chief executive, also warned that the planned strikes at Gatwick airport are another headache.
Although the unions partially suspended action thanks to a new wage agreement, hundreds of ground workers are still on strike at the airport next week and into August.
Top flight: EasyJet posted record profits of £203m for the three months to the end of June, up from a loss of £114m the previous year
Sophie Lund-Yates, Principal Equity Analyst at Hargreaves Lansdown, said: ‘Industry strikes have the potential to wreak havoc and the extent of this remains to be known.
“The broader implications of cancellations or drastic changes will greatly affect earnings momentum if the troubles drag on.”
Airlines are also facing unusually hot weather in Europe, with temperatures reaching nearly 50 degrees, though Lundgren said the extreme conditions have not affected bookings yet.
“The British have long gone to places like Egypt or Turkey in August, which constantly have very hot temperatures.
“So it doesn’t seem to be an issue for a lot of people. They are on vacation, sitting by a pool or swimming in the Mediterranean and have air-conditioned hotels,” the Easyjet boss said.
The excellent results, which exceeded analysts’ expectations, were bolstered by rising ticket prices, which were up 17 years over the previous year. The average price of a ticket is now £73.
Lundgren said half of the average 11-pound-per-seat fare increase was due to fuel, with gains largely driven by customers paying for add-ons such as choosing seats and luggage.
Revenue from these plug-ins was up 28 per cent compared to last year, to £622m.
Average revenue per seat rose to £90.49, up 22 per cent, and up 36 per cent from before the pandemic.
Total revenue rose 34 percent on the year to £2.4bn, with a “nice booking boost” in the winter. The shares fell 3.9 percent, or 19.3 pence, to 475.6 pence.